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FSA fines three mortgage brokers for poor sales procedures

The Financial Services Authority, or FSA, has fined three mortgage brokers for inadequate sales procedures which meant they could not demonstrate that they had recommended affordable mortgage contracts that met their clients' needs.

The FSA has fined Mohammad Rana, registered as countrywide management consultancy and trading as property compass countrywide GBP14,700, Peter Scott trading as the mortgage house GBP11,900, and Chariot Mortgage Services GBP10,500. All three mortgage brokers agreed to settle early and therefore qualified for a 30% discount. Were it not for this discount their penalties would have been GBP21,000, GBP17,000, and GBP15,000, respectively.

These mortgage brokers’ failings were found during a series of visits by the FSA’s Small Firms and Contact Division which focused in particular on self certification mortgages and affordability of mortgage advice.

Jonathan Phelan, head of retail enforcement at the FSA, said: It is deeply disappointing to find that mortgage brokers visited by the FSA are falling short of basic standards aimed at ensuring that they treat their customers fairly.

We will continue to take disciplinary action against mortgage brokers who cannot demonstrate that the mortgage contracts they recommend are affordable.